Goal: 100 million tons of coal

It was nearly New Year’s Eve when Minister of Coal Industry Serhii Tulub held a teleconference with the directors of the industry’s enterprises, summarized results, and set objectives for 2007. “Everywhere we need to assert the miners’ working style, which is based on organization, initiative, efficiency, as well as individual and shared responsibility for the entrusted task,” he said. The minister added that he has no doubt that the miners will restore their earlier authority in society and increase the efficiency of their work.

In 2006 Ukrainian miners produced 80.3 million tons of coal, including 30.2 million tons of coking coal (up by 2.8 million tons compared to the previous year) and 50.1 million tons of power-generating coal (up by 3.0 million tons). This is 2.3 million more tons than in 2005. The industry produced over 5.8 million tons of coal in excess of the plan (108.2%). Most of the excess coal (5.7 million tons) was delivered by six state-owned enterprises and 46 mines. The coal-mining industry received 632 million hryvnias in capital investments, including 515 million hryvnias from the state budget. New production facilities capable of delivering 600,000 tons of coal per year were put into operation.

In the last five months alone, the allotment for new equipment to be used in stoping faces reached 350 million hryvnias compared to 160 million hryvnias in the previous seven months. During this period mine builders almost doubled the volume of building operations at the new Novovolynska no. 10 mine: 32 million hryvnias were used up in the first seven months and 64 million hryvnias in the subsequent five months. Already on Dec. 19, 2006, the first car of coal was raised from the working tunnel of this mine. There are plans to bring a mining facility into operation there in 2007 and start engineering works on three new mines — Krasnolymanska-Hlyboka, Novosvitlivska, and Chervonohradska no. 3.

In 2005 social tensions among miners were successfully eased. Overdue salaries, amounting, as of Aug. 1, 2006, to 176 million hryvnias, were paid to miners employed in operating enterprises. There are no delays with current salaries at coal-mining and mine-building entities. As of Jan. 1, 2007, 43 million hryvnias in salaries and arrears have not been paid at 74 enterprises — they are out of operation, in the process of being closed down, or have gone bankrupt.

Miners’ average salary rose to 1,460 hryvnias (up by 298 hryvnias, or 26 percent, from 2005). In particular, miners in stoping faces earned 2,450 hryvnias (+588 hryvnias, or 32 percent) and face- advancing miners 2,200 hryvnias (+485 hryvnias, or 28 percent).

The 2007 state budget allocates 5.2 billion hryvnias for the coal industry, up by 799 million hryvnias from 2006. Appropriations for research on coal mining were increased by 17.7 million hryvnias, for industry reorganization by 146.2 million, capital investments by 610 million, occupational safety by 110 million, and conveying public-use objects to communal municipal property by 50 million. Administration and trade union representatives jointly formed committees for allocating budget funds at mines.

For 2007 the government has tasked the Ukrainian coal industry with securing high competitiveness for its coal products. Coal production across the industry needs to be boosted to 82.2 million tons, and by the end of 2011 it should reach 100 million tons.

This acceleration presupposes completing at least 310 kilometers of exploratory and development workings and constant high-speed work of 93 heading teams that will need to complete 121 kilometers of mine workings and 35 stoping faces. To secure sustained development of coal mining in 2007, the government has set an urgent task for coal- mining enterprises: to prepare at least one longwall face, and in mines where there is one, no fewer than two such faces. Mines with two or more longwall faces must not allow their closedowns. All in all, 162 new longwall faces, including 125 cutter faces, will need to be brought into operation.

The task of coal quality control is becoming more urgent. Coal has to conform to the demands of the environment and the consumer market. The State Coal Products Quality Control Inspection is being set up for this purpose. In 2007, the ash content of coal should not be less than 39 percent, while the heating (calorific) value should not be lower than 4,515 kcal/kg.

As far as unprofitable mines are concerned, the industry is unable to carry this virtually unmanageable burden. In 2006, reorganization activities affected 136 coal-mining and peat-extracting enterprises. Now 114 of them are being closed down, another 17 are being prepared for closure, and 11 mines have been transferred to the state enterprise Ukrshakhthidrozakhyst. Closure procedures were completed at 12 coal-mining enterprises.

Parliamentarian Natalia Korolivska told The Day that the Verkhovna Rada prepared a New Year’s “present” for miners. Korolivska represents Luhansk oblast, and miners’ problems are close to her heart. She says that in the last working week of 2006, in the heat of the budget dispute and power game between the branches of power, parliament managed to ignore the bill “On Making Amendments to the Law of Ukraine “On Renewing the Solvency of a Debtor or Adjudging a Debtor Bankrupt.” This bill envisages prolonging until 2010 the moratorium on bankruptcy of coal-industry enterprises with a state share of 25 percent or higher.

Prior amendments to this law prolonged the moratorium until the end of 2006. By virtue of this provision, dozens of coal-industry bankruptcy cases were suspended or closed, freeing the enterprises from the greedy eye of all sorts of defrauders, who had mastered the trick of bringing coal-mining enterprises to bankruptcy. They would use fairly simple schemes, driving up the mines’ debt to the budget, Pension Fund, banks, and creditors. These machinations worked smoothly: dozens of mines were subjected to reorganization or bankruptcy procedures, but only a few to criminal investigation for fraudulent bankruptcy.

Starting on Jan. 1, 2007, bankruptcy proceedings against Ukrainian mines can again be instituted with a vengeance.